APMacro: PF Financial Institutions

Financial institutions help people manage their money, protect it, and make it grow. People often use different types of financial institutions at different stages of their lives. Of these institutions, we will examine four types of financial institutions. This lesson invites the students to investigate services available from financial institutions in their own community. As an example of a common financial service, the lesson stresses checking accounts—their main features and the mechanics of using them

In the past, each type of financial institution offered specific and limited services. Banks took deposits to be placed in checking accounts, savings accounts, and certificates of deposit, and they granted credit in the form of loans to qualified individuals. Savings and loans offered savings accounts and home mortgages. Credit unions, a type of member-owned cooperative, made low-interest loans available to their members. Brokerage firms bought and sold stocks for customers on an exchange, and offered other financial services.

Deregulation in the financial industry has blurred the lines between these institutions and increased competition among them. For example, savings and loans now can offer checking accounts and many types of loans in addition to home mortgages. Many commercial banks now can offer brokerage services.



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